I love investing in ASX dividend shares which offer a solid dividend yield and can provide investors with capital growth over the longer-term.
Businesses that are growing earnings have the ability to increase their payouts and justify a higher share price.
Following multiple RBA rate cuts this year, the real estate investment trust (REIT) sector looks more appealing with attractive distribution yields and the potential for growth in property values. Let's look at two that appear to me to be appealing investments.
Image source: Getty Images
National Storage REIT (ASX: NSR)
National Storage is a business that owns a national network of storage unit locations. The business saw growth in FY25, and I believe this bodes well for further growth in FY26 and beyond.
In the 2025 financial year, National Storage reported its group revenue per available metre (REVPAM) grew 1% year-over-year to $277.3 per square metre, while the net tangible assets (NTA) per security rose by 2.4% to $2.58.
If the business can continue growing REVPAM, then earnings and capital growth are much more likely, in my view. It's expected that underlying earnings per security (EPS) will grow by at least 4.2% to 12.4 cents, following a 6.4% rise in FY25.
National Storage continues to add to its portfolio with 14 developments completed in FY25, adding 98,000 square metres. It also has a pipeline of 54 site developments, which bodes well for medium-term growth.
I expect the FY26 distribution from the ASX dividend share in FY26 will be at least 11.2 cents per security, translating into a forward distribution yield of 4.7% at the time of writing.
Rural Funds Group (ASX: RFF)
Rural Funds is a real estate investment trust (REIT) that owns a variety of farm types including cattle, vineyards, almonds, macadamias and cropping.
The business has signed tenants onto long-term contracts, with examples including Treasury Wine Estates Ltd (ASX: TWE), Select Harvests Ltd (ASX: SHV), JBS and Olam. It's good to have strong tenants because that provides stronger rental security.
Rural Funds is benefiting from regular rental growth contracted with tenants, with increases either being fixed annual growth or linked to inflation. This provides a solid tailwind for rental earnings to rise in the coming years.
In FY26, the ASX dividend share expects to grow its adjusted funds from operations (AFFO) – net rental profit – by another 1.7%.
The guided distribution of 11.73 cents in FY26 translates into a distribution yield of 6%. I think that's an appealing passive income payout.
